The coronavirus had wide-reaching effects on the residential construction industry including increased profit margins for builders and skyrocketing material prices. To quantify more of the implications of the coronavirus on residential construction in the US, we analyzed more than 84,000 projects completed using CoConstruct’s construction project management software from 2018 - 2020 in conjunction with national data from the US Census Bureau.
In this post, we will dig into the numbers on how projects took longer to complete in 2020, how the scale of residential construction projects changed in 2020, and where CoConstruct builders differed from their national counterparts.
New Builds Completed In 2020 Took 64 More Business Days To Complete
Across the United States, home building projects that ended in 2020 took an average of 64 more business days to complete than projects that ended in 2019 and 2018. This 36.6% increase in project duration was felt differently across US regions with projects in the Northeast taking 78 more business days to complete compared to projects in the South only taking 57 more business days to complete. Projects in the West took on average 74 more business days to complete and projects in the Midwest took 60 more days to complete than the previous two years.
Residential construction projects priced under $250,000 also saw an increase in project duration in 2020. These projects took on average 14 more business days or 19.1% longer to complete than projects that were completed in 2019 and 2018. Increased project duration was felt the most by construction professionals in the Midwest who saw their projects take 22 more days to complete. On the other end of the spectrum, projects in the West only took 7 more business days to complete. Projects in the South and Northeast straddled the US average with projects taking 15 and 13 more days to complete respectively.
CoConstruct builders saw less volatility in 2020 projects starts
When comparing the monthly rate of CoConstruct home builder’s project starts against project start data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, you can see where CoConstruct builder’s deviated from the national trend. We normalized the project starts for CoConstruct builders to the national data for new privately-owned single housing units to be able to make a comparable comparison between the two data sets of different scales.
CoConstruct builders started off 2020 on a higher note with more project starts in January when compared to the national project starts. National project starts also saw a higher rate of volatility with three times the average month-to-month percent change in project starts compared to Coconstruct project starts.
CoConstruct builders started 20% more projects in 2020 compared to 2018
CoConstruct builders that have been using our construction project management software for the past three years have seen their average number of home building project starts rise from 2.2 starts per year in 2018 to 2.6 project starts per year in 2020. This 20.8% rise over three years shows the increase in production that CoConstruct builders saw compared to the 3.3% increase national builders saw in the same time frame.
Big growth in smaller construction projects
Another insight we found in analyzing the past three years of CoConstruct builder data is the growing trend of smaller construction projects. For all CoConstruct projects in the US priced under $250,000, the percentage of projects priced under $20,000 has grown from 43.5% in 2018 to 54.4% in 2020. This growth in small construction projects came at the expense of larger projects. Residential construction projects priced between $20,000 - $50,000, $50,000 - $100,000, and $100,000 - $250,000 all experienced downward trends over this time frame. Projects priced $100,000 - $250,000 saw the largest three-year decrease with a 4.7% decline.
Where we got our numbers from
CoConstruct helps over 100,000 building professionals manage clients and trade partners, schedule work, track financials, and more. Aggregating and analyzing the data builders input into the system, CoConstruct can identify trends and highlight emerging issues in the residential construction industry. By using and sharing this information CoConstruct is doing its part to eliminate the chaos of project management and help create rewarding experiences for both home builders and clients.